Evaluating Financial Advisors

Finding the right financial planner can be quite difficult. There are many important factors to consider when making this important decision. The advisors credentials, experience, and personality are all important things to evaluate when choosing a financial advisor. Check to see if they have professional designations such as the CFP or CPA-PFS (See Article: Financial Advisor Licenses). Another good question to ask is how the planner will be compensated. Some planners operate on a fee-only basis while others are on salary or offer commission based products (See Article: How Do Financial Planners Get Paid?) .

When choosing an advisor, you always want to make sure that their personality and values are in sync with your expectations. You should not feel intimidated or uncomfortable working with your advisor or simply calling them to ask questions about your accounts, the stock market, or general personal finance questions. Make sure your advisor is accessible and familiar with your personal situation. Some of the larger wirehouses or investment firms have so many clients, that it is easy for them to overlook certain individuals or have more important profitable clients which take up most of their resources. It is important to be comfortable and familiar with your advisor and the environment in which they operate.

Where to Begin the Search

Most people begin their search on the internet or in the phone book. If you are using the internet for your initial search, a good place to reference would be financial planner directories by the FPA (Financial Planners Association) or NAPFA (National Association of Personal Financial Advisors). These directories generally screen advisors to some degree or may even require membership and participation in the organization. Usually there are links to the company’s website which may provide even more information on the specific services they offer.

Another simple but overlooked way to find an advisor is by word-of-mouth or personal reference. Typically planners work with clients for a long period of time and develop personal relationships. Just ask your friends or relatives who they work with for a point of reference.

When choosing an advisor, get a sense of their personality and philosophies to make sure they are in sync with your values. You should not feel intimidated or uncomfortable working with your advisor or simply calling them to ask questions about your accounts, the stock market, or general personal finance questions. Make sure your advisor is accessible and familiar with your personal situation. Some of the larger wirehouses or investment firms have so many clients, that it is easy for them to overlook certain individuals or have more important profitable clients which take up most of their resources. It is important to be comfortable and familiar with your advisor and the environment in which they operate.

Schedule a Meeting

Once you have narrowed down your search to a few advisors, you should schedule initial consultations with each one, either by phone or in person. Ask the advisor any questions you have regarding their services or fees. Make sure you are comfortable with who you will be working with and that you completely understand the nature of the relationship. Get the terms in writing. Any legitimate financial advisor or advisory firm will provide you with a written contract detailing the scope of the relationship, management fees, investment policy statement and other terms.

Always request a contract in writing before beginning any services or assigning any powers over your assets. If you choose to work with an independent advisor, make sure to request a copy of the advisors Form ADVII. This is a regulatory filing which Registered Investment Advisors provide to the FINRA oversight organization.

If you would like to schedule an appointment to meet with Chrome Asset Management, please reach out to see if we are a good fit.

Focus on the More Important Aspects of Your Life

Now that you have made the decision to get help and support with your financial future, you can start focusing on the most important aspects of your life. Make sure to maintain good communication with your financial advisor and keep them informed on some of your larger financial decisions such as starting a family, saving for college, or purchasing a new home. Maintaining this communication will create a high level of trust and value to the client-advisor relationship.

4 Comments

  • Nero Getty says:

    It’s definitely something I need to do, but it seems like quite a bit of work. Nothing beats a referral in this type of business. I think I will ask around…

  • Mollie Haber says:

    Yea, i just use my parents advisor. that’s what most kids i know do.

    any good advisors working with college students? do you guys do that?

  • Chrome Asset Management says:

    We’re not aware of any financial advisors that focus primarily on college students as their niche. Many of our clients are in college, but we serve a much wider demographic as well.

    Many college students can get financial advice from their parents advisor. It is a great way to learn the process and most advisors will offer complimentary financial planning services to children of clients. This may consist of a brief meeting or something more comprehensive. Ask around. It’s never to soon to start looking around.

  • Chrome Asset Management says:

    Thanks and enjoy!

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